Promoting an Intrapreneurial Environment in Microfinance Institutions as a Catalyst for Innovation. The Case of Ugandan MFIs

Abstract

This paper investigates the extent to which the intrapreneurial environment within Microfinance institutions (MFIs) enhances innovation. The study was motivated by the scarcity of information on the internal organizational factors that drive innovations in MFIs despite a wide body of literature on innovation and its role in a dynamic environment. The quantitative approach was applied using a cross section design surveying 113 MFIs in Uganda. Data analysis used descriptive statistics, cross tabulations and partial least square modelling. The results showed that two of the components of the intrapreneurial environment ('organization motivation to innovate' and 'intrapreneurial resources') had a positive significant relationship with innovation. 'Intrapreneurial management practices' did not have a significant relationship with innovation. Overall, the intrapreneurial environment had a positive significant relationship with innovation. In conclusion, the intrapreneurial environment constitutes an internal force stimulating innovation throughout the organization. Therefore, MFIs should nurture such environment to ignite innovations in response to the current strong competitive context.